Risk Management and Trading Plan (and the majic of compounding)

Risk Management and R:R (risk:reward)

• Risk no more than 1-3% of your account per trade

• R:R minimum 1:3

Example. $5000 account

Trade no more than risking 1-3% of account means %50-150 max.

Remember! $1 BTC = 1pip

BTC trade 1 lot size on example of Broker with 1 contract size: 50-150 pip max SL ($50-150 movement in BTC

Remember! $1 ETH = 10 pip

ETH trade 1 lot size on example of Broker with 1 Contract size: 500-1500 pip max SL ($50-150 movement in ETH)

Remember! $1 BTC = 1pip

BTC trade 0.1 lot size on example of Broker with 10 contract size: 50-150 pip max SL ($50-150 movement in BTC

Remember! $1 ETH = 10 pip

ETH trade 0.1 lot size on example of Broker with 10 Contract size: 500-1500 pip max SL ($50-150 movement in ETH)

TRADING PLAN!

Fail to plan? Plan to fail.

Trading Plan

• WHY am I trading?

• What kind of trading will I be focusing on? (e.g. Scalping? Swing? Exchange?)

• What are my goals? Focus on % !!!!

• My schedule: when do I look at charts? When do I study? GoLive!

• What strategy am I committed to mastering?

• What pair/s am I trading?

• Time frames?

• Market conditions?

• Risk management?

• What are my entry confirmations

• How am I managing mt trade once I am in it?

Example: I have $5000 account, I am an intraday trader, my goal is 100% of my 1-3% risk daily.

Therefore, I risk $50-150 maximum with a goal to make %50-150per day. I trade BTC ($1=1 pip), my Broker has 1 contract Lot size, I use 1 Lot. Therefore I must make 50-150 pips per day.

My R:R is 1-3

Therefore I more my SL to break even (or rake paritals) when I’m 50-150 pips in profit to secure mt $50-$150 per day.

Anything extra is a BONUS, and I am grateful (MINDSETTTT!)

COMPOUND!

Compounding is the process of the exponential increase in the value of an investment due earning % interest on both initial value AND accumulated interest

Example: 

.

MINDSET!

• What are pre- and post- trading rituals?

• What will I write in my trading journal?

• What are my MUSTS?

Example: “The Ten Trading Commandments”

1. I SHALL PRESERVE MY CAPITAL

2. I SHALL NEVER OVER-LEVERAGE

3. I SHALL LOOK AT LOSSES AS LESSENS

4. I SHALL NOT TRY TO GET RICH QUICKLY

5. I SHALL SPEND TIME ANALYZING MY TRADES

6. I SHALL STICK TO MY RISK MANAGEMENT RULES

7. I SHALL STICK TO MY TADING PLAN NO MATTER WHAT

8. I SHALL TAKE BREAKS, AND NOT GET ADDICTED TO GAMBLING

9. I SHALL NEVER TRADE WHEN I’m UNWELL, SAD MAD, OR ANGRY

10. I SHALL NEVER TAKE A BIGGER BET THAN CAN AFFORD TO LOSE